It depends how it’s funded. Strictly speaking that’s only the case if it’s funded monetarily by a central bank printing more money for a government to fund UBI. For example this is how most countries funded businesses and individuals during the pandemic and what has lead to the inflation you’re referring to. Otherwise there is the same amount of money in the economy, it’s just been fiscally re-distributed using a UBI policy. You might still see some inflation in some parts of the economy due to rising demand but if people can afford more, rather than less, this inflation no bearing whatsoever on people’s actual prosperity. If funded fiscally UBI would outstrip any inflation it might incur and therefore actually represent real-terms deflation for the vast majority of people. As a side note, what we are getting at the moment is the exact opposite: money was printed in huge amounts by central banks during the pandemic which largely ended up in the pockets of people who bought up assets like housing and are now out-competing everyone else in the market and extracting yet more profit. It might feel like inflation to us because food and bills have increased in value faster than our wages, but the wealthy have actually been experiencing real-terms deflation because their stash has been growing faster than their costs.
“If funded fiscally UBI would outstrip any inflation”.
Source for this claim please? Its been years but I seem to recall the Roosevelt Institute paper Yang relied on saying something different (worth noting Yang misrepresented this paper).
I think the best evidence for this claim is past experience with a UBI via the alaska ongoing UBI. Federal reserve graph showing that since alaska implemented its UBI (in 1982) it has had lower inflation than the US at large.
I’ll dig it up later but I suspect you have that backwards. As I recall the tax funded UBI produces little to no growth so it shouldn’t cover inflation
This is actually the opposite of what studies seem to be suggestion.
The fear is, instead, that it will reduce values, especially housing, and that businesses and wealthier individuals would move away. Admittedly, if it’s truly universal, then there would be nowhere for them to move. But the real, often-forgotten underlying gain is that it would create some leverage for employees seeking jobs and raises.
Of course, an “unemployed-only” income would create more employee leverage, possibly matching or exceeding the leverage provided by unions because the employee could afford to strike indefinitely.
Which are a fictional thing we invented. How awful, a more equal society where people cannot as easily be superior! Do people really fear such a thing?
I’m really not sure what you think you’re getting out of this reply. Or hell, what you’re even trying to say. But here’s my college try at replying anyway.
Before I get to line-items, I’d like to reiterate that you’re arguing for “pay everyone money” in response to “pay people who aren’t working a living wage” and acting like giving money to the rich makes a more equal society than that. If I had $50k/yr guaranteed any day I wanted if I quit, I’d have a whole lot more leverage to get another $1000/mo from my employer AND be treated well.
How awful, a more equal society where people cannot as easily be superior!
That would be socialism, not a UBI. The economic concerns about UBI are that it will weaken the average quality of life and that every implementation ever pitched has a fatal flaw. Yang’s, for example, would hurt the poor and middle class while not actually redistributing any wealth from the rich. Models also suggest they will be job-killers, and not in the obvious way of giving people leverage.
Do people really fear such a thing?
Yeah, they’re so afraid of socialism they try to create capitalist equivalents like UBI
Yang’s issue is he flipped the tax funded UBI and deficit funded UBI’s growth numbers. There is almost no growth from UBI unless it is money falling from the sky.
Yang’s issue is that he wanted to fund UBI by using it to eradicate welfare. And there were a dozen very solid problems with that he was unwilling or unable to meaningfully address. Some of the families who would need his UBI the most are the same families who would have to opt out because their welfare is valued at more than it.
I used to be all-in for UBI in general, but over the years (thanks in part, but not entirely, to Yang) I walked off that ledge. The government should be guaranteeing housing/food/healthcare the same way they guarantee education. What they should not be doing is cutting a check and shoving fingers in their ears in the welfare equivalent of Privatized Social Security.
What people don’t want to accept is that under UBI, there will still be comparable homelessness to what we see now because a leading (perhaps the #1) cause of homelessness is addiction. The government subsidizing rental and home payments without means-testing would allow even addicts to have a place to sleep at night. Even they deserve that. And yes, there’s inflation “risks” with incentivizing housing or food, but it’s no more or less than with UBI or with just the FCC approving another big merger.
I think it’s realistic. I just think it’s not the right solution.
UBI is a massive undertaking, but so is Social Security, Universal Healthcare, or a modern military. The GDP is $23.3T, but the current tax income is only 12-15% of that (approx $4.1T). Yang’s UBI would cost a whopping $4T, but here’s the missing link. As much as we whine like little bitches about taxes in the US, we are quite literally middle of the pack for taxes as a percent of GDP. UBI is realistic, but it would require a full overhaul of our economy.
I just don’t think a full overhaul of our economy is worth the benefit of UBI. $25B could end hunger in the US, and $700B would socialize food entirely at no cost to individuals. Somewhere in the middle, we’d probably get 90% of the benefits of socializing food with a lot less costs. Housing is the same situation (ironically, the estimated cost to end homelessness is also about $25B, though I don’t know what “subsidized housing for all” would look like). We could do both AND have some money to incentivize being unemployed to counteract job leverage (the one big win in UBI imo) all together in $1T or less, a much less disruptive overhaul for more return.
And we could throw in universal healthcare for good measure. Yeah, there’s a tax cost, but studies show it pays for itself in individual savings and economic growth
If you make the maths, the direct inflactionary effects of UBI are quite small unless people were getting tens of thousands of dollars per month, and there are indirect effects pushing in the opposite direction (for example, fewer loans hence less money getting created by banks).
You’re making claims that an entire domain supports your conclusion but haven’t even gone to the trouble of making the maths to confirm it - you just assumed.
For example the “average household wealth” in the US is $1,059,470 and the average household size is 2.5, so an UBI of $500 per month for every man, woman and child of the United States (rounded to 300 million because I couldn’t be arsed to find the exact number) would depreciate that wealth (i.e. inflate its nominal worth) by about 1% per year (assuming 12x UBI payments per year). This is are only the first order effect, as indirect effects push in both directions (for example, it will push salaries at the low end higher, which is inflationary but not by much because it’s only lower salaries being affected, and it will reduce number of loans issued which reduces money creation and is thus deflactionary but again the deflactionary effect depends on actual proportion of loans that are not issued due to UBI making the money available).
All together macroeconomics does not confirm the effect you claim it does (an in fact the Alaskan experiment shows the opposite) but even if you only consider first order effects, it shows an inflactionary effect which is around half of the FED’s anual inflation target, so a mild effect and certainly not justifying the statement that UBI “only works in a perfect society where the market doesn’t take advantage of it”.
Macro is the field that would support the idea that giving people more money would increase the sale price of things like housing.
I don’t need to math out the inflationary impacts of UBI to make the claim that Macro backs the idea that giving everyone more money will increase the costs of housing. That’s historically demonstrable.
The Alaskan income bonuses aren’t relevant to this because they aren’t large enough to have distortionary effects.
Inflation and generally every market trying to push the limits of how much they can exploit their customers in every possible occasion.
I mean, if I have to choose between the current situation and UBI I’ll obviously go for that one, I’m not 100% sure it’s not going to work. But if we have to try and radically change society with a very expensive procedure, I’d rather they do it in the most foolproof way possible.
Says who?
Macroeconomics? If you increase the pool of money people compete to spend on a good or service we can expect the value to increase.
It depends how it’s funded. Strictly speaking that’s only the case if it’s funded monetarily by a central bank printing more money for a government to fund UBI. For example this is how most countries funded businesses and individuals during the pandemic and what has lead to the inflation you’re referring to. Otherwise there is the same amount of money in the economy, it’s just been fiscally re-distributed using a UBI policy. You might still see some inflation in some parts of the economy due to rising demand but if people can afford more, rather than less, this inflation no bearing whatsoever on people’s actual prosperity. If funded fiscally UBI would outstrip any inflation it might incur and therefore actually represent real-terms deflation for the vast majority of people. As a side note, what we are getting at the moment is the exact opposite: money was printed in huge amounts by central banks during the pandemic which largely ended up in the pockets of people who bought up assets like housing and are now out-competing everyone else in the market and extracting yet more profit. It might feel like inflation to us because food and bills have increased in value faster than our wages, but the wealthy have actually been experiencing real-terms deflation because their stash has been growing faster than their costs.
“If funded fiscally UBI would outstrip any inflation”.
Source for this claim please? Its been years but I seem to recall the Roosevelt Institute paper Yang relied on saying something different (worth noting Yang misrepresented this paper).
I think the best evidence for this claim is past experience with a UBI via the alaska ongoing UBI. Federal reserve graph showing that since alaska implemented its UBI (in 1982) it has had lower inflation than the US at large.
I don’t have an academic source; it’s my own prediction based on a) what I’ve seen/am seeing in the economy and b) my own personal finances.
I’ll dig it up later but I suspect you have that backwards. As I recall the tax funded UBI produces little to no growth so it shouldn’t cover inflation
This is actually the opposite of what studies seem to be suggestion.
The fear is, instead, that it will reduce values, especially housing, and that businesses and wealthier individuals would move away. Admittedly, if it’s truly universal, then there would be nowhere for them to move. But the real, often-forgotten underlying gain is that it would create some leverage for employees seeking jobs and raises.
Of course, an “unemployed-only” income would create more employee leverage, possibly matching or exceeding the leverage provided by unions because the employee could afford to strike indefinitely.
“Reduce values”
Which are a fictional thing we invented. How awful, a more equal society where people cannot as easily be superior! Do people really fear such a thing?
I’m really not sure what you think you’re getting out of this reply. Or hell, what you’re even trying to say. But here’s my college try at replying anyway.
Before I get to line-items, I’d like to reiterate that you’re arguing for “pay everyone money” in response to “pay people who aren’t working a living wage” and acting like giving money to the rich makes a more equal society than that. If I had $50k/yr guaranteed any day I wanted if I quit, I’d have a whole lot more leverage to get another $1000/mo from my employer AND be treated well.
That would be socialism, not a UBI. The economic concerns about UBI are that it will weaken the average quality of life and that every implementation ever pitched has a fatal flaw. Yang’s, for example, would hurt the poor and middle class while not actually redistributing any wealth from the rich. Models also suggest they will be job-killers, and not in the obvious way of giving people leverage.
Yeah, they’re so afraid of socialism they try to create capitalist equivalents like UBI
Yang’s issue is he flipped the tax funded UBI and deficit funded UBI’s growth numbers. There is almost no growth from UBI unless it is money falling from the sky.
Yang’s issue is that he wanted to fund UBI by using it to eradicate welfare. And there were a dozen very solid problems with that he was unwilling or unable to meaningfully address. Some of the families who would need his UBI the most are the same families who would have to opt out because their welfare is valued at more than it.
I used to be all-in for UBI in general, but over the years (thanks in part, but not entirely, to Yang) I walked off that ledge. The government should be guaranteeing housing/food/healthcare the same way they guarantee education. What they should not be doing is cutting a check and shoving fingers in their ears in the welfare equivalent of Privatized Social Security.
What people don’t want to accept is that under UBI, there will still be comparable homelessness to what we see now because a leading (perhaps the #1) cause of homelessness is addiction. The government subsidizing rental and home payments without means-testing would allow even addicts to have a place to sleep at night. Even they deserve that. And yes, there’s inflation “risks” with incentivizing housing or food, but it’s no more or less than with UBI or with just the FCC approving another big merger.
Im the sameI was all in until I did the deeper dive into the literature. Now I see it as realistic as jetpacks.
I think it’s realistic. I just think it’s not the right solution.
UBI is a massive undertaking, but so is Social Security, Universal Healthcare, or a modern military. The GDP is $23.3T, but the current tax income is only 12-15% of that (approx $4.1T). Yang’s UBI would cost a whopping $4T, but here’s the missing link. As much as we whine like little bitches about taxes in the US, we are quite literally middle of the pack for taxes as a percent of GDP. UBI is realistic, but it would require a full overhaul of our economy.
I just don’t think a full overhaul of our economy is worth the benefit of UBI. $25B could end hunger in the US, and $700B would socialize food entirely at no cost to individuals. Somewhere in the middle, we’d probably get 90% of the benefits of socializing food with a lot less costs. Housing is the same situation (ironically, the estimated cost to end homelessness is also about $25B, though I don’t know what “subsidized housing for all” would look like). We could do both AND have some money to incentivize being unemployed to counteract job leverage (the one big win in UBI imo) all together in $1T or less, a much less disruptive overhaul for more return.
And we could throw in universal healthcare for good measure. Yeah, there’s a tax cost, but studies show it pays for itself in individual savings and economic growth
You can’t just cite an entire field and call it an answer. Especially when than field is basically a pseudoscience.
Lol ok buddy. Tell us more about your complete lack of understanding of what science is.
If you make the maths, the direct inflactionary effects of UBI are quite small unless people were getting tens of thousands of dollars per month, and there are indirect effects pushing in the opposite direction (for example, fewer loans hence less money getting created by banks).
You’re making claims that an entire domain supports your conclusion but haven’t even gone to the trouble of making the maths to confirm it - you just assumed.
For example the “average household wealth” in the US is $1,059,470 and the average household size is 2.5, so an UBI of $500 per month for every man, woman and child of the United States (rounded to 300 million because I couldn’t be arsed to find the exact number) would depreciate that wealth (i.e. inflate its nominal worth) by about 1% per year (assuming 12x UBI payments per year). This is are only the first order effect, as indirect effects push in both directions (for example, it will push salaries at the low end higher, which is inflationary but not by much because it’s only lower salaries being affected, and it will reduce number of loans issued which reduces money creation and is thus deflactionary but again the deflactionary effect depends on actual proportion of loans that are not issued due to UBI making the money available).
All together macroeconomics does not confirm the effect you claim it does (an in fact the Alaskan experiment shows the opposite) but even if you only consider first order effects, it shows an inflactionary effect which is around half of the FED’s anual inflation target, so a mild effect and certainly not justifying the statement that UBI “only works in a perfect society where the market doesn’t take advantage of it”.
Macro is the field that would support the idea that giving people more money would increase the sale price of things like housing.
I don’t need to math out the inflationary impacts of UBI to make the claim that Macro backs the idea that giving everyone more money will increase the costs of housing. That’s historically demonstrable.
The Alaskan income bonuses aren’t relevant to this because they aren’t large enough to have distortionary effects.
Inflation and generally every market trying to push the limits of how much they can exploit their customers in every possible occasion.
I mean, if I have to choose between the current situation and UBI I’ll obviously go for that one, I’m not 100% sure it’s not going to work. But if we have to try and radically change society with a very expensive procedure, I’d rather they do it in the most foolproof way possible.